DESCRIPTION (adapted from the application) Current treatment options for chronic hepatitis C infection remain limited and unsatisfactory. Treatment with interferon-alpha and ribavirin leads to a sustained response in the minority of patients, and many patients may not be eligible for treatment due to side effects associated with these medications. Other treatment options are clearly necessary for chronic hepatitis C infection. A major complication of chronic hepatitis C infection is fibrogenesis, ultimately leading to development of cirrhosis. Animal models have demonstrated that interferon-gamma reduces fibrogenesis through its effect on stellate cells. A recent report in patients with idiopathic pulmonary fibrosis found that interferon-gamma was well-tolerated and led to improved pulmonary function, ostensibly due to a reduction in fibrogenesis. Given these data, we postulate not only that interferon-gamma will be effective for treatment of hepatitis C mediated fibrogenesis, but also that it will be safe. We have therefore proposed a phase I study to assess the effectiveness of interferon-gamma in twenty patients with chronic hepatitis C infection. The patients will include those who have failed previous therapy with interferon-alpha or are not candidates for interferon-alpha therapy. Men or women 18 years of age or older are eligible. Other inclusion criteria are serum positive for hepatitis C virus by PCR; liver biopsy consistent with chronic hepatitis and with a fibrosis score of at least one on the Knodell scale; compensated liver disease; and informed, written consent obtained prior to entry. All patients will receive 200 micrograms of interferon-gamma three times a week for twelve months. Patients will undergo liver biopsy prior to treatment and at the end of treatment. Safety and tolerance will be evaluated at weeks 1, 2, 4, 8 and then every 4 weeks during treatment and at weeks 4 and 12 following the completion of therapy. Serum HCV-RNA will be evaluated prior to initiating therapy and at the end of therapy. The primary endpoint of this study will be the histological response of patients with chronic hepatitis C infection to treatment with interferon-gamma. Secondary endpoints include the biochemical response, inflammatory and regulatory cytokine levels, and quality of life during treatment.